I think the main issue with IRA/ROTH IRA is that DD would be able to do something foolish, as opposed to Foolish, once she hit 18.

With 529, it must go to educational expenses.

I have also been doing some digging at my companies annual benefits fair... NY State 529 had a booth.

They explained it much like some of the posts here. By moving the money from her savings account (I am custodian) to the 529 I have set up, it would essentially by her giving money to me. They (like the previous post) suggested I talk to a tax attorney for actual legal advice. What I came away from that discussion was that it "could" be consider her 'gifting' the money to me--though it would be put into an account for her benefit.

OTOH, if I was able to set up a 529 in HER name as owner, with me as custodian, financial aid formulas would penalize her for having more assets. This is where funding a retirement account would be preferable...

Thanks for the continuing conversation here! This is both fascinating and infuriating stuff :-)